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hdfc mutual fund

hdfc mutual fund

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Published by: rameshmba on Apr 30, 2008
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CHAPTER ONE:1) INTRODUCTION:1.1.1 MUTUAL FUND: 
The SEBI regulations, 1993 defines a mutual fund as “a fund in the form of atrust by a sponsor, to raise money by the trustees trough the sale of units to the public,under one or more schemes, for investing in securities in accordance with theseregulations”
 
A mutual fund is a professionally-managed firm of collective investmentsthat pools money from many investors and invests it instocks,  bonds, short-termmoney  marketinstruments, and/or other securities.In a mutual fund, thefund manager,who is also known as the portfolio manager, trades the fund's underlying securities, realizingcapital gainsor losses, and collects thedividendor interest income. The investment  proceeds are then passed along to the individual investors. The value of a share of themutual fund, known as thenet asset valueper share (NAV), is calculated daily based onthe total value of the fund divided by the number of shares currently issued andoutstanding.1.1.2 HISTORY OF THE MUTUAL FUND:
In the beginning:
Historians are uncertain of the origins of investment funds; some cite the closed-endinvestment companies launched in the Netherlands in 1822 by King William I as the firstmutual funds, while others point to a Dutch merchant named Adriaan van Ketwich whoseinvestment trust created in 1774 may have given the king the idea. Van Ketwich probablytheorized that diversification would increase the appeal of investments to smalleinvestors with minimal capital. The name of van Ketwich's fund, EENDRAGT MAAKTMAGT, translates to "unity creates strength". The next wave of near-mutual fundsincluded an investment trust launched in Switzerland in 1849, followed by simila
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vehicles which is followed by many kind of companies created in Scotland in the 1880s.The idea of pooling resources and spreading risk using closed-end investments soon took root in Great Britain and France, making its way to the United States in the 1890s. TheBoston Personal Property Trust, formed in 1893, was the firstclosed-end fundin the U.S.The creation of the Alexander Fund in Philadelphia, Pennsylvania, in 1907 was animportant step in the evolution toward what we know as the modern mutual fund. TheAlexander Fund featured semi-annual issues and allowed investors to make withdrawalson demand.
The Arrival of the Modern Fund :
The creation of the Massachusetts Investors' Trust in Boston, Massachusetts, heraldedthe arrival of the modern mutual fund in 1924. The fund went public in 1928, eventuallyspawning the mutual fund firm known today as MFS Investment Management. StateStreet Investors' Trust was the custodian of the Massachusetts Investors' Trust. Later,State Street Investors started its own fund in 1924 with Richard Paine, Richard Saltonstalland Paul Cabot at the helm. Saltonstall was also affiliated with Scudder, Stevens andClark, an outfit that would launch the firstno-load fundin 1928. A momentous year in thehistory of the mutual fund, 1928 also saw the launch of the Wellington Fund, which wasthe first mutual fund to include stocks and bonds, as opposed to direct merchant bank style of investments in business and trade.
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Regulation and Expansion:
By 1929, there were 19open-end mutual fundscompeting with nearly 700 closed-end funds. With the stock market crash of 1929, the dynamic began to change as highly-leveraged closed-end funds were wiped out and small open-end funds managed tosurvive.Government regulators also began to take notice of the fledgling mutual fund industry.The creation of the Securities and Exchange Commission (SEC), the passage of theSecurities Act of 1933and the enactment of theSecurities Exchange Act of 1934put in place safeguards to protect investors: mutual funds were required to register with theSEC and to provide disclosure in the form of a prospectus. TheInvestment Company Act of 1940put in place additional regulations that required more disclosures and sought tominimize and minimize grievience of investor of different catogeries conflicts of interest.The mutual fund industry continued to expand. At the beginning of the 1950s, the number of open-end funds topped 100. In 1954, the financial markets overcame their 1929 peak,and the mutual fund industry began to grow in earnest, adding some 50 new funds over the course of the decade. The 1960s saw the rise of aggressive growth funds, with morethan 100 new funds established and billions of dollars in new asset inflows.Hundreds of new funds were launched throughout the 1960s until the bear market of 1969 cooled the public appetite for mutual funds. Money flowed out of mutual funds asquickly as investors could redeem their shares, but the industry's growth later resumed.Massachusetts Investors Trust (nowMFS Investment Management) was founded onMarch 21,1924, and, after one year, had 200shareholdersand $392,000 in assets. The
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